Mr. Speaker, I am pleased to speak to Bill C-574, an important and timely piece of legislation introduced by the hon. member for York West, who is also known as our critic on seniors and pensions.
This piece of legislation, known as the “Retirement Income Bill of Rights”, has become very popular throughout the country. My colleague has travelled throughout the country and has had discussions from coast to coast to coast on the importance of dealing with issues affecting seniors and pensioners.
This is the first bill of its kind ever proposed to protect our seniors and their savings. The legislation proposes to enshrine in law the notion that all Canadians have the right to contribute to a decent retirement plan, and to be provided with up-to-date unbiased and conflict-free information on their retirement savings.
Bill C-574 has been well researched and vetted. It is the product of months of research and consultations with legal experts, government officials, and most importantly, seniors and pensioners. The bill is a comprehensive piece of legislation that does not aim to simply change one thing or another; rather, it is designed to address systematic and societal challenges relating to Canada's pension system and retirement income.
In developing this bill, the hon. member for York West who, as I said, is the official opposition's critic for seniors and pensions, went from coast to coast to coast. She spent time in my riding of Random—Burin—St. George's. One troubling theme became obvious when she was in my riding. It is clear that Canadians are not saving enough for their retirement, not because they do not want to, but simply because they cannot afford to. It is a sad reflection on our nation when our pensioners and seniors are in such dire straits that they have trouble contributing to their own savings and their own retirement incomes. It is a troubling trend. Fortunately in this House of Parliament we have the opportunity to change that. As legislators we can directly affect that.
The people we met in my riding encounter difficulties day to day, whether it is in paying high home heating costs, paying for the rising cost of gas, or paying their electrical bills that are going up all the time. It is a sad reflection on our society today that in a lot of cases seniors have to leave their homes in the daytime and spend time in shopping malls just to keep warm. They have to make decisions about whether they buy food or medication, or whether they heat their homes. They cannot do all three, again because of their income.
From old age security to the CPP and the supplement, we understand the extreme importance of protecting and preserving pension security and ensuring adequate coverage for all Canadians in the years after they stop working.
There are some dismal statistics to report. There are more than 200,000 Canadians over the age of 65 who live below the low income cutoff line. In a country like Canada, it is disgraceful. It is unfortunate that the government seems to be untroubled by the situation. The government prefers to cut social programming and essential services and make irresponsible corporate tax cuts worth billions, $6 billion a year to be precise. This is to say nothing of the government's priorities to fund things like multi-billion dollar fighter jets and U.S.-style mega prisons.
All of these initiatives pale in comparison when we consider the situation that our seniors find themselves in today.
Statistics Canada also tells us that Canada's population over the age of 65 could reach an unprecedented 10.9 million by 2036. Seventy-five per cent of those people will not have an adequate source of retirement income. That is because most Canadians working in the private sector do not have a pension plan and are not saving enough. They are effectively prevented from accumulating the same retirement income as their public sector counterparts.
With those numbers in mind, we have two choices. We can ignore the problem until it becomes a national crisis, or we can address it now before it becomes a crisis.
The basic cost of living is taking its toll on seniors and retired Canadians. Most Canadians will find it harder and harder to get by on CPP unless the system is changed.
Currently, individuals participating in generous defined benefit pension arrangements routinely accumulate five to seven times more retirement income than those who do not. These defined benefit plans are available only to public sector workers and to a very small minority of private sector workers. This creates a large societal imbalance when it comes to retirement income.
Public sector workers make up only a very small percentage of our population. Hard-working Canadians who spend a lifetime working in industries like the agricultural industry or as small business owners, or who stay at home to care for their children and families will not have the benefit and security of such generous pension plans.
As it stands now, the Income Tax Act states that an individual cannot have a generous defined benefit pension plan unless it is provided to him or her by his or her employer. Most employers in Canada do not provide for such a pension plan.
This bill is concerned with creating the conditions in which all Canadians would have access to pension plans that help them save for a secure retirement.
In particular, clauses 4 and 5 of Bill C-574 guarantee equality of opportunity. The bill would provide that any federal law that has the effect of restricting an individual's right to join a pension plan or flexibility to make the contributions necessary to accumulate an adequate retirement income would indeed be a violation.
If Bill C-574 becomes law, it would be unlawful to prevent people from joining a pension plan or restrict their right to make contributions, subject to reasonable restrictions that would apply equally to all individuals.
The hon. member's bill aims to eliminate the barriers that currently prevent the self-employed, fishers, farmers, homemakers and all others in the workforce who do not now have access to pension plans to allow them to save effectively for retirement.
Bill C-574 acknowledges that dignity in retirement is a right and that we as legislators should move to ensure that all will have such dignity through a secure and equitable retirement income regime.
This bill would also ensure that every Canadian would have access to effective retirement savings mechanisms. It would do this through empowering people with detailed, up-to-date, conflict-free information about their financial future.
The goals of this bill are simple: to create substantive rights; to give every person a chance to accumulate retirement income in a plan that will be there in the long term; to promote good administration of retirement income plans; to ensure that members of retirement income plans regularly receive good, plain language information they need about their plans; and to set out in law the goals to which we aspire legislatively as they relate to retirement income.
It is simply unacceptable that in this great and prosperous nation many elderly people live in poverty or near poverty. The Liberal Party has always understood and championed the values of security, safety and dignity.
One of the most important aspects of the bill is financial literacy. For the most part, Canadians are unsure as to the existence and/or impact of various tax provisions, savings vehicles and/or estate planning options. It is widely accepted that Canadians collectively spend billions of dollars each year on service charges, interest expenses, fees and lost income resulting entirely or in part from a lack of financial literacy. By providing greater access to timely and easily understandable financial management information, Canadians could save money which could be redirected to retirement savings.
The Liberal Party fully supports strengthening our retirement systems. Pensions and their protection is a priority for us. The Conservative Party, on the other hand, has a history of opposing improvements to Canada's pension plans, and of ignoring one of the most vulnerable groups in society.
While we have an old age security and pension system that has served Canadians well in the past, the Liberal Party recognizes there is a need to improve upon the system that we have grown and nurtured over the years.
As I meet with my constituents, it becomes obvious that the need is great. We need to deal with that. We need to start addressing the pension shortfalls today if we are to prevent a full-blown crisis in the years ahead.
In closing, the guiding principle behind the bill is the belief that a strong and secure retirement income system is essential to the well-being of Canadians.